The unbanked: stop catering for the middle classes and open up to the world

VIEWPOINT: Bladimir didn’t want a bank account. The 22-year-old son of corn and bean farmers in rural El Salvador had moved to the capital in search of greater economic opportunity, but a bank account was not part of that plan. He had grown up with stories of scams and disappointments, and had a deep distrust of bank accounts as a safe way to store his money.

Bladimir, however, was not given a choice. As part of his job as a security guard at a mall, he was required by his employer to open an account in order to receive his pay.

Bladimir’s entry into the formal financial system happened at a time when the poor of the world were gaining unprecedented access to financial tools and services. Regulatory changes and technological advances were complemented by an international push from multilateral organisations to make sure that poor people were able to have bank accounts.

This all follows a grand target (set by the World Bank) of achieving universal financial access by 2020, allowing 2 billion adults who currently aren’t part of the formal financial system to gain access to a transaction account to store money, send and receive payments as the basic building block to manage their financial lives.